Biplot Methodology Applied to an Intellectual Capital Model

Florinda Matos, Albino Lopes, Nuno Matos, Valter Vairinhos
The Electronic Journal of Knowledge Management   unpublished
The global economy is changing. Resources are scarce and companies, of all sizes, need to be more competitive and productive. The company's financial risk ratings have demonstrated numerous weaknesses. The funders, shareholders or even the State need tools that improve the quality of their decision making. Several authors argue that the real competitive advantages resulting from the management of intangible assets, i.e. assets of knowledge, as a condition for achieving the productivity and
more » ... oductivity and competitiveness. However, organizations have always valued the knowledge; the novelty is the recognition that knowledge is an asset that must be managed with the same attention given to other assets. The literature contains numerous definitions of knowledge. Nonaka and Takeuchi (1995) consider knowledge as "a dynamic human process of justifying personal belief about the truth" and the understanding how crucial to the creation of knowledge to differentiate between tacit knowledge (which is obtained through practice) and explicit is. In this sense, knowledge is the information to be used by the human mind allowing the decision-making. And knowledge management is the ability that the organization has to identify and codify knowledge, stimulate their development and facilitate its implementation (Lopes and Matos, 2005). The knowledge management can also be understood as the orientation of the dynamics of subjectivity and objectivity within the organization (Rowley and Gibbs, 2008), maximized through use of new technologies and organizational networks. From this perspective, knowledge management is the quality of the interactions of individuals, teams, processes and customers and its ability to identify and encode the same knowledge, stimulate their development and facilitate its implementation. Following the conceptualization these are the dimensions that allow us to define intellectual capital. But to manage in times of market globalization, in which trust is based on evidence, becomes crucial to know whether it is possible to audit and certify assets of organizations. Therefore, it is necessary to create reliable and accessible tools in this field. Thus, intellectual capital management, in a form which is able to be audited and certified in order to control the quality and dynamism of the knowledge generated in the organization, will enable the partner organizations (customers, suppliers and lenders) to determine the capacity for innovation, and verify the conformity of their management parameters, compared to a reference standard. Considered this conceptualization, Matos and Lopes (2009), proposed a methodology to audit intellectual capital management, which has been refined through several researches. This paper summarizes the results obtained with one of these researches. Using the biplot methodology (Gabriel, 1971) it was possible to reconfirm the proposed methodology. It shows that development degree of intellectual capital can be audited in a credible way, using this methodology.